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Strategies & Market Trends : The Art of Investing

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To: Real Man who wrote (5210)	8/22/2022 3:49:47 PM
From: Sun Tzu	Read Replies (1) of 10701

Yes, the wealth in China (and the government budget) is very much tied to RE. But no, decades of doom and gloom are not a given. Chinese markets don't experience bubbles the way Americans do b/c China is a communist country. And also b/c China is fairly self contained that foreign hot money cannot pour in and jump out on whim. If I were to make a broad long term generalization, it will be that the 40 year boom has come to an end and we have now entered secular bear market and will likely have stagflation for a decade or more. This prediction doesn't mean that we won't have rallies and bull markets any more than the 40 year secular bull market did not mean we did not have corrections and bear markets (e.g. 1987, 2001, 2008, among others). But the idea that you will recover your losses if only you hold on long enough is likely a thing of the past. It really is different this time. Why? B/C the prosperity of the last 40 years was built on the back of global liquidity pump that did not create inflation because China and the emerging markets provided cheap goods for that liquidity. Now that the supply chains are being dismantled and there is no room to print more money, that cycle is coming to an end. Printing more money in this environment leads to higher inflation. Not printing more money will also lead to inflation b/c we are busy dismantling globalization and supply chains. The only way to delay this is to not on-shore and integrate the global checks and balances better. This doesn't seem likely since there is so much political distaste for it. But who knows, perhaps once real pain starts to kick people in the gut, then policy makers will decide that globalization is not so bad.

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